Allahabad High Court
The Assistant Commissioner ... vs Smt.Meena Tewari on 29 May, 2012
Bench: Ashok Bhushan, Prakash Krishna
HIGH COURT OF JUDICATURE AT ALLAHABAD
?Court No. - 32
Case :- INCOME TAX APPEAL No. - 21 of 2011
Petitioner :- The Assistant Commissioner Income Tax
Respondent :- Smt.Meena Tewari
Petitioner Counsel :- Ssc/Shambhu Chopra
Respondent Counsel :- Satish Mandhyan
Hon'ble Ashok Bhushan,J.
Hon'ble Prakash Krishna,J.
Heard Shri Shambhu Chopra, learned counsel for the appellant and Shri Satish Madhyan appearing for the assessee.
This appeal under section 260-A of the Income Tax Act has been filed against judgment and order of the Income Tax Appellate Tribunal dated 20.8.2010 passed in I.T.A No.129/Alld/2010. The Assessing Officer by assessment order dated 13.10.2009 completed the assessment on income of Rs. 20,79,867/-.
The contention of the assessee that Section 50C is not applicable and the nature of the capital gain is long term capital gain was not accepted. The assessment was made after invoking section 50C and treating the capital gain as short term. The appeal was filed by the assessee against the order of the assessment order. The Commissioner (Appeals) vide its judgment and order dated 31.3.2010 allowed the appeal holding that the Capital Gain arising due to such transfer shall be taxable as long term capital gain. The CIT(A) held that Section 50(C) would not apply to sale deed executed on 16.3.2005 and capital gain shall be payable only on Rs. 2,55,000/- for the transfer of roof rights. Following findings were recorded by the CIT(A) in paragraph nos. 6.18 and 6.19.
"6.18. Thus, I find force in the Arguments of the Counsel of the Appellant that if the possession was not handed over then how could the Purchasers renovate the Show room to make a Jewelry Shop, make Security vaults and install air conditioners. I find that the Possession was duly received by the Purchasers as the Settlement Agreement dated 23.4.1992 which is a Registered Agreement between both the purchasers which prove that after receiving the possession they renovated the Show room for making a Jewelry Show room, got a Firm Registered with the Sale Tax Department. I conclude that the Transfer of Shop in question was completed as per Section 2(47) of the Income Tax Act when the appellant and the co-owners received the payment from the purchasers Mrs.Sheela Singh and delivered the possession to her. The transfer of Shop was an individual Transaction of Property though the Sale Deed could not be executed.
6.19. From the Documents on record (TDS Certificates) filed as Additional Evidence I find that the present owners are in possession of the Property since 1999 and they have been enjoying Rent from a partnership concern and who are making TDS from the Rent paid to the present owners. All these documentary evidences on record prove the contention of the Appellant that the possession of the Shop in dispute by them was handed over by them several years ago and much prior to the execution of Sale Deed on 16.3.2005 and Transfer was completed u/s 2(47) of the Income Tax Act 1961."
The Revenue filed an appeal against the judgment and order of the CIT (A). The Tribunal affirmed the findings of the CIT(A). Following the findings were recorded in paragraph 6 & 7 by the Tribunal.
"6. We have heard the rival contentions and perused the material available on record. We concur with the views of the Ld.CIT(A) and the arguments made by the Id.Counsel for the assessee, Mr.Sanjay Kumar, Advocate that the assessee had purchased the shop on 10.10.90 through agreement of sale for which possession had been handed over on 29.10.1991. They buyer has renovated the shop and constructed a show room for jewelry business. The roof rights was not sold by the assessee as is evident from sale deed executed on 16.3.2005 available at PB pages 59-87. The roof right was sold on 16.3.2005. As a matter of fact the agreement of sale is a registered one when the shop was originally sold by the assessee. Thereafter, the sale deed on freehold basis was executed only on 16.3.2005 on which date through the said sale deed the roof right was sold by the assessee and long term capital gain was declared. The AO according to the sale deed considered the first transaction of sale i.e the sale of shop originally sold on 27.2.91 for which possession was given on 29.10.91 and the roof right sold on 16.3.2005 as a sale on short term capital gain and taxed during the impugned year. This approach of the AO is basically incorrect since the shop has been sold on 29.10.91 when the vacant possession had been given to the buyer. Therefore, the said shop cannot be taxed during the A.Y under consideration.
7. As regards the roof right sold through a sale deed dated 16.3.2005, the assessee has declared the long term capital gain and, therefore, the same cannot be treated as short term capital gain. Since the assessee had purchased the property vide agreement on sale dated 10.10.90 and which was sold on 29.10.91 and 16.3.05, therefore, there is no question of treating the same as short term capital gain during the impugned year in view of sections 2(42A), 2(29)A, 2(47), 45 and 48 of the Act. In the facts and circumstances of the case the order of the Ld.CIT(A) is reasoned one. We find no error in his order. In the circumstances and facts of the case ground nos. 1 to 6 of the revenue are dismissed. "
It has been found as fact that the assessee-respondent had purchased the property in the year 1991. It was converted into freehold on 24.11.2004. The roof rights were transferred by means of sale deed executed on 16.3.2005. The assessee has declared the long term capital gain in respect of roof right which was treated as short term capital gain by the Assessing Officer.
Indisputably, the assessee purchased the entire property on 29.10.1991 and executed the sale deed in respect of roof right for the first time on 16.3.2005. In this fact situation, it has been rightly held by the Tribunal that there was no question of treating the same as short term capital gain. A presumption is attached to registered document unless proved otherwise. The Assessing Officer disregarded the registered documents. Registered agreement to sale dated 27.2.1991 executed by the assessee and co-owners to Smt.Sheela Singh and Shri Ajay Agrawal wherein roof rights are specifically excluded. The assessee retained full rights for the roof of the shop. It is mentioned therein that any kind of construction on the roof would continue to remain vested with the assessee and the co-owners. It was not open to the Assessing Officer to disregard the said registered document on guess, conjuncture or surmises.
The present appeal is concluded by findings of the fact which have been recorded by the CIT(A) and the Tribunal. After considering the materials on record and considering the submissions raised by the learned counsel for the Revenue, we find that no substantial question of law is involved in the appeal.
The appeal is dismissed.
(Prakash Krishna,J) (Ashok Bhushan,J)
Order Date :- 29.5.2012
IB
